China Hanking Holdings said it plans to expand the output of high-purity iron, a raw material in wind-turbine components, in anticipation of strong demand from the mainland’s renewably energy industry.
The Hong Kong-listed miner aims to increase the production of high-purity ductile casting iron by more than 30 per cent to 800,000 tonnes this year, Tang Wenbin, vice-president and director of its Hanking Australia unit, said on Tuesday. The firm is also eyeing acquisitions to entrench its market dominance.
“Judging from the wind power development plan for the 2021-2025 period, the wind power sector will maintain a relatively rapid growth in the next decade,” said Tang. The group has benefited from China’s wind power sector and will strive to meet growing demand by stepping up its capacity, he added.
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The Chinese company, which holds a leading position in domestic iron ore production and has a gold mining business in Australia, entered the high-purity iron business in 2019 to supply materials to China’s downstream wind turbine makers.
Hanking produced 600,000 tonnes of high-purity iron in 2021, or about 65 per cent of its annual capacity. The firm is the largest industry player, accounting for over 50 per cent of China’s total output of the metal, according to company data. Its sales amounted to 2.49 billion yuan (US$380.5 million), or 80 per cent of the group revenue.
Hanking is looking to expand its capacity through acquisitions of other producers, company secretary Zhang Jing said.
She said this was because Hanking’s production capacity was limited owing to strict qualification approvals for equipment used to produce wind power ductile casting iron.
China installed 17 gigawatts of offshore wind capacity in 2021, according to the National Energy Administration. The significant expansion means China now operates almost half of the world’s installed offshore wind capacity of 54GW.
Chinese President Xi Jinping announced in September 2020 that the country will aim to peak carbon emissions by 2030 and achieve carbon neutrality in 2060. China, the world’s biggest carbon emitter, is forecast to add 93GW worth of new offshore wind power capacity from 2021 to 2030, according to resource consultancy Wood Mackenzie.
According to China’s latest 14th Five-Year Plan from 2021 to 2025, which was approved in March last year, Beijing will “extensively expand the generation scale and size of wind and solar power”, bolstering the leading position of wind in the nation’s clean energy strategy.
The rapid development of offshore wind power and large-scale wind turbines are two trends that are benefiting Hanking’s products, Zhang said.
Hanking, which listed in Hong Kong in September 2011, posted a 75 per cent increase in net profit to 659 million yuan last year, the fifth consecutive year of profit growth.
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